Poly Email4 Nov 2022 19:14
Interesting dividend possibilities!!
Below is an email exchange posted by someone else in the US, on a BB I won't name as LSE seems touchy about that kinda stuff. I've abbreviated a bit in places as copied out from screenshots, but I've not changed any meaning.
Dear xxxx
'Usual hello etc'
Evgeny. There is a lot to unpack from your message. So lets tackle it piece by piece.
Q. As part of that process, I am under the impression that the shares from the Moscow Stock Exchange would be transferred to another exchange, like Hong Kong or Kazakhstan.
A. Not really, Poly is listed on 3 exchanges, at no point of the process of change of domicile and potential split of the business into Poly R and Poly K do we envisage change of plan of current listing. Upon completion of the potential split of the company into Poly R and Poly K, WE MAY CONSIDER additional listing elsewhere.
Q. I am under the impression that Russian capital controls would not permit the transfer of dividends from Poly R to entities outside of Russia.
A. Not entirely correct. Russian counter-sanctions ban transfer of dividends from Russia to 'unfriendly' jurisdictions, (lists the US/UK etc. The rest of the world is 'friendly' and not subject to capital controls.
Q. So I am not sure how all the shareholders (excluding those remaining on MOEX) Would be able to receive money from Poly R?
A. Your understanding is not accurate. It's the other way around, in case we decide to pay dividends in 2023, it's the shareholders on MOEX who may not receive dividends, given the sanctions imposed on NSD, central CSID, which holds those shares.
Q. Or is it that the discussion for the March 2023 dividend will be funded from the free cash flow of the operations in Kazakhstan? If the Board approves a dividend in 2023 will FCF from Poly R be part of the equation or only Poly K?
A. In fact in 2021 (and it's obvious in 2022 as well) Russian assets where not FCF generative, but assets in Kazakhstan were / are. So realistically, we should not expect meaningful FCF distribution from Russian assets.
I hope that answers your questions.
Evgeny etc etc.
The poster is taking follow up questions and will post the response soon. I'm having tingles about the Poly K possibilities here. There was a discussion about why Poly R isn't cash flow positive right now, suggestions that they are writing down value at a higher rate, but answers to that may be forthcoming after another email.
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